Margaret Hodge, chair of the Commons public accounts committee, says transparency is essential in the fight against tax avoidance. Photograph: Andrew Winning/Reuters

Margaret Hodge, chair of the influential Commons public accounts committee, has welcomed an initiative to rank Britain's retailers by the tax they pay and their use of tax havens.

The Fair Tax Campaign created by the tax accountant Richard Murphy, has awarded 25 retailers a score between 0 and 15; those scoring more than 12 earn a "fair tax mark".

High-street baker Greggs, which forced the government into a U-turn over the pasty tax, tops the league with a maximum 15 out of 15 points. The campaign said Greggs came top because it paid all of the tax it might be expected to, and did not have any subsidiaries in tax havens. Majestic Wine came second with 14 points.

Sainsbury's, WH Smith, Carphone Warehouse and Argos owner Home Retail Group came bottom of the league with just 2 points out of 15 because of alleged use of tax havens, failure to pay "an acceptable rate of tax" on profits and not reporting financial figures on a country-by-country basis. The firms disputed the campaign's figures, methodology and conclusions.

Hodge said transparency was essential in the fight against tax avoidance. "Companies care about their reputations, so knowing their customers can see whether or not they are paying their fair share could have a powerful deterrent effect," she said.

Sainsbury's, which scored lowly because it does not break down financial reporting country by country and allegedly has subsidiaries in tax havens, said it "entirely rejects the allegation that we are not paying our way". The company said all of its profits were generated in the UK and taxed in the UK. "Last year we paid £144m in corporation tax and considerably more in other taxes, and in an independent survey we ranked 14th highest in the FTSE 100 in terms of UK tax borne even though we were only the 46th largest company.

Carphone Warehouse said it paid all its taxes and said Murphy's study "bears no resemblance to reality".

WH Smith and Home Retail Group also said they paid all their taxes and disputed Murphy's claims.

Murphy said that other the past six years that the study covered, companies increased their profits by 47% but the tax they paid rose by just 22%.

He singled out Tesco has having the biggest "tax gap" – the difference between the tax rate it was expected to pay and the amount it declared due. According to Murphy, Tesco's tax gap over the past six years was £1.5bn.

A Tesco spokesman said: "We are one of the largest payers of tax in the UK. In the year to February 2013 we contributed £1.5bn directly, including £387m in corporation tax. The allegation of a tax gap is like accusing an Isa holder of tax avoidance. It is due largely to deferred tax from capital allowances and roll-over relief, both incentives specifically designed by government to support investment in the UK economy and the creation of jobs and trading profit, on which we pay corporation tax."

Murphy said several companies were still "in denial" about the need to report earnings on a country-by-country basis and their use of tax havens. "Many of the companies we surveyed use tax havens and are open about it. Others simply disclose where their subsidiaries are. That is no longer acceptable."

He claimed that Tesco had more than 50 subsidiaries in tax havens, including the British Virgin Islands, the Cayman Islands and Jersey and Guernsey.

Tesco said all profits generated by its UK businesses were "fully taxed in the UK and we have no structures which artificially reduce these profits".

A spokesman said the subsidiaries in low-tax jurisdictions were all either holding companies, dormant, registered for UK tax, or subject to controlled foreign company rules and agreed with HMRC.